Gross investment is the : a. Expenditure on new plants, equipment, and residential construction, plus changes in business inventories. b. Consumption of capital in the production process. c. Wearing out of plant and equipment. d. Alternative combinations of final goods and services that can be produced with all available resources and technology.

Question

Business

Immanuel Franco

2 April, 17:40

Gross investment is the : a. Expenditure on new plants, equipment, and residential construction, plus changes in business inventories. b. Consumption of capital in the production process. c. Wearing out of plant and equipment. d. Alternative combinations of final goods and services that can be produced with all available resources and technology.

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Jack Greer · Answer 1

a. Expenditure on new plants, equipment, and residential construction, plus changes in business inventories.

Explanation:

Gross investment is the punt that is invested in a business without considering depreciation cost. When depreciation is removed we get net investment.

Investment can be in fixed assets (such as new plants, equipment, and residential construction) or on variable assets (such as inventory or working capital).

Gross income is the total amount invested in fixed and variable aspects of the business.